Provider M&As: Daunting Task & Major Communications Challenge

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Guest Author: Kathy Lewton

Change is epidemic in the health care industry, particularly in the provider sector, but last week’s announcement of the Bezos-Buffet-Dimon “health care” company startled even the most jaded observers.

The merger jokes were predictable.

“Mass General, Duke and United Healthcare didn’t like their IT systems so they started a computer company.” “Antibiotics at the ATM?” “Does Prime cover a face lift?”

The message to providers is clear: Payers are going from restless to rebellious.

Not that change has been absent.

2017 was a year of record-setting merger and acquisition activity, with two mega-mergers (“largest not-for-profit health care system in the country”) announced in the same week.

For entities who may have spent hundreds of thousands to develop the perfect brand, the concept of a new name/new brand, and all the subsequent changes (signage, letterhead, and on and on) is daunting. Even the easy-sounding solution, “We can just sub-brand with the Newco name,” is never remotely easy. (Just think about the pain of getting one system brand through approvals and multiply it times two.)

There are must do’s.

Start immediately. Get the right team together and use a research and data-based process that will make both parties feel that they had equal say in the final decision.

Beyond simply sharing information, a merger is about change at all levels – from the “simplest” things like standardizing purchasing, to changes in titles, benefits and compensation plans and finally, the melding of two distinctively different cultures.

All of this can, at best, create high anxiety among employees, and at worst, result in significant employee disengagement that affects retention, recruitment, patient satisfaction, quality, service, productivity, and eventually, the bottom line.

And physicians unhappy with even the concept of a merger have demonstrated from coast to coast that they can scuttle or significantly delay completion of the deal.

Another must do: Involve specialists in culture transformation as early as possible—well before the first announcement of intention—to help avoid long-term internal damage.

Not to be forgotten are the external stakeholders, who ask “what’s in this for us,” or “how is this going to hurt us?” In some states that means regulators or legislators. In all states, the sentiments of the community, from leaders to influencers to past patients, can make or sometimes break a merger.

For these audiences, the must do’s are consistent, intentional external communications, with heavy focus on proactive media relations using earned, owned and social media. Anticipate issues, address threats, and, if a flame is ignited, move immediately to address the concerns and extinguish or mitigate the criticism.

These must do efforts—centered with a powerful narrative that is developed by master storytellers— will lay the foundation for a successful merger that can meet payer and consumer demands for change.

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